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Tuesday, the Houston Metropolitan Transit Authority (Metro) held a blogger luncheon with senior Metro people (Chairman, CEO, board members, managers) at the Rail Operations Center south of Reliant.  It was an informative event with a lot of good two-way Q&A.  And it included an impressive tour of the facility, which, btw, is not air conditioned in the main maintenance bay.  Let's just say it was the right time of year for a tour and I'm really glad I don't work there in the summer.  The facility is doing its job though: Metro claims to have the highest operational uptime for rail cars in the country.

Sometimes in my push for increasing commuter bus services and cutting back rail, I fail to give credit to a lot of good work that is going on at the "New Metro":
a few issues for our collective consideration:

They really are a lot more open and transparent, and are really trying to do the right things.  
There's been a lot to clean-up, and they've done a good job (although CEO Grenias says it will take another 2-3 years to completely turn around the organization).  
They've also done a good job continuing to reach out and create collaborative agreements to provide commuter bus services outside of their service area (like Baytown and Pearland).
They've fixed the poorly performing Airport Direct service, price and route-wise.
They shifted to a cash basis for the General Mobility Program instead of increasing debt.
They fixed their broken relationship with the FTA.

There was a lot of good talk about improving express commuter bus services to TMC, Greenway, and, most importantly, Uptown.  I pitched them on expanded HOV/HOT lanes (like the 610 Loop) and laptop trays and wifi on the commuter buses, which are under consideration.  They have a very high percentage of downtown commuters - 30-40% - and claim a pretty high number for TMC - 20-30% - but that includes people who park in Smithlands and ride the rail, which I don't consider a true commuter solution (it's not doing anything to reduce freeway congestion).

Ultimately, they're trapped by the voter referendum and the federal money process to keep pursuing a rail plan (and line prioritization) that really doesn't make a lot of sense given the new fiscal reality since the referendum was passed.  It will make even less sense if the Republican House guts rail funding.  But at least they're taking steps to "firewall" the rail plan financially so it doesn't end up stealing from critical local and commuter bus operations.  I may not agree with the overall strategic direction of the agency, but they do have good people doing good work within the constraints of the game they're forced to play.

This post originally appeared at houstonstrategies.com

The Bureau of the Census has just reported that the city of Chicago lost more than 200,000 people between 2000 and 2010. At 2,696,000, this takes Chicago to its lowest population since 1910, and nearly 1,000,000 fewer than its census population peak of 3,621,000 in 1950. In 1910, the city had a population of 2,185,000, and increased in 1920 to 2,702,000.

The Bureau of the Census had estimated Chicago's population at 2,851,000 in 2009, down from the 2000 census count of 2,897,000. Chicago is the seat of Cook County, which lost 180,000 between 2000 and 2010, though outside the city of Chicago, Cook County gained approximately 20,000 residents.

Paul Krugman really doesn’t like the possibility that there is a structural shift in employment, because it weakens the argument for the massive Keynesian spending spree he’d like to see the government initiate.  To that end, he published this piece on his blog February 13th.

Before we go on, some readers may wonder what a structural shift is and why it weakens the argument for Keynesian spending.  A structural shift is when employment permanently shifts (well, as much as anything is permanent in economics) from one economic sector to another, say from construction to healthcare.

The reason that a structural shift weakens the Keynesian’s argument is that moving workers from one sector to another takes time.  They may need retrained.  They may need to move to another location.  Think of our construction worker moving to health care.  He or she probably doesn’t have the skills to be immediately employable in health care.  Some sort of education or training has to happen first.

This poses a problem for Keynesian expansionists, because their argument is that the only problem is a drop in aggregate demand (consumer spending) brought about by….well, animal spirits.  Since there is no real problem, government can increase spending (it doesn’t matter what you spend the money on.  You could dig holes and fill them back up), fool the consumer into thinking she is better off, and voilá, aggregate demand goes up with the government spending.

Problem solved.  It’s a beautiful thing.

However, spending can’t solve the problem of unemployment brought about by a structural shift.  It takes time to retrain the affected workers.  There are things government can do to speed the process, but spending willy-nilly is not one of them.

Hope that clears things up.  Let’s get back to Krugman’s piece.

He claims that unemployment in every sector has just about doubled since the recession began, and that this is proof that no structural shift is going on.  He has a nice chart to show the increase in unemployment by sector.

There is a problem though.  The Bureau of Labor Statistics—the same source that Krugman claims originated his data—reports that construction jobs fell by 2 million, or 26.7 percent, from December 2007 through December 2010, while education and healthcare jobs grew by1.2 million, or 6.5 percent.

This appears to contradict Krugman’s data, but it is possible that both sets of data are true.  If they are both true, then Krugman is being no less dishonest than if he created his numbers out of thin air.
If Krugman is telling the truth when he presents a graph showing that unemployment approximately doubled from 2007 to 2010 in both the construction and the education and healthcare sector, then is must be that large numbers of unemployed construction workers migrated to being unemployed education and healthcare workers.

There is no other possible explanation.

This, of course, completely contradicts Krugman’s argument.  If his data are true, he’s using data that confirms a structural shift to argue that there is no structural shift, by neglecting to disclose the jobs data I’ve disclosed above.

Krugman is not a dumb guy.  He has a well-deserved Nobel Prize for his work on international economics.  He has a career of looking at data, in depth and with insight.  His failure to provide the entire story has to be considered something besides an oversight.  We have to conclude that he’s purposely being deceitful.

I don’t know why a guy with all of Krugman’s gifts and accomplishments would use data deceitfully.  It is a shame, though, that an economist at the top of his profession and with the New York Times bullhorn uses that bullhorn to confuse instead of to enlighten.

CensusScope’s dissimilarity index measures the distributions of blacks and whites across a city to quantify the level of integration and segregation. The site discerned three major Midwestern cities in the top ten: Detroit, MI in second; Milwaukee, WI in third; and Chicago, IL in fifth. These cities are major hubs for their region, both socially and economically. But does segregation affect quality of life? And does it help or hinder job growth?

In order to get a decent comparison between these segregated cities and their quality of life, it’s necessary to take into account three cities with relatively low segregation: Minneapolis at 107; Austin, TX at 179; and Madison, WI at 213.

To estimate quality of life, let’s look at three factors from the American Community Survey, 2009: Percentage of population with a Bachelor’s degree of higher; percentage of population considered unemployed; and percentage of families below the poverty level. Comparing the different values with their respective city produces an interesting result.

The cities with the most segregated neighborhoods tend to have a less-educated base, contain a higher amount of unemployed workforce, and also have more families below the poverty level. On the other hand, Madison, Minneapolis, and Austin all boast high levels of educational attainment, relatively low unemployment rates, and a smaller percentage of families living below the poverty level, although Austin comes close.

However, Madison and Austin are relatively smaller than the other areas listed here, and have prospering tech sectors and contain well-known universities that tend to dominate the city’s economy. With respect to this, segregation may not be a factor at all. Instead, the city’s development and more tech-oriented economies may be the answer.

From these results, one may be able to cite segregation as an obstruction to a strong quality of life. One variable that seems to stick out amongst the data is that of educational attainment. Does education reduce segregation, or does segregation impede education?>

It is always encouraging to see greater objectivity in the treatment of the suburbs. In fact, the urban form includes not only the urban core, but also the suburbs and economically connected rural areas and exurban areas that are beyond the urban footprint. This fact has often been missed by some urbanologists who imagine no city extends beyond the view on the foggiest day from a central city office tower.

William Upski Wimsatt, author of Bomb the Suburbs, has now published an update called Please Don't Bomb the Suburbs. The title of Wimsatt's original book, focusing on grafitti and hip-hop culture, has a ring reflective of the irrational and ideological condemnation that has been far too typical of some of the urban planning community.

Wimsatt cites five myths about suburbs in a Washington Post opinion piece. To be charitable, he gets as many as four of them right. These include his discovery that suburbs are not white middle-class enclaves, that they can be "cool," that they are not necessarily politically conservative, and that suburbanites care about the environment.

However, Wimsatt still has some distance to go. His last myth suggests that suburbs are not the result of the free market. This general proposition is tenable, for example, given large lot zoning requirements, which have caused many urban areas to consume far more land than they would have if the market had been allowed to operate. The problem with Wimsatt's free-market analysis is his acceptance of three additional myths.

Myth 1: Smart Growth Reduced Property Taxes in Portland: Wimsatt cites an analysis indicating that property taxes in Portland dropped between the mid-1980s and the mid-1990s while property taxes in Atlanta increased. He uses this "factoid" to imply that Portland's more restrictive land use planning regime ("compact development" or "smart growth") is superior to the more liberal Atlanta approach. Wimsatt does not note that during this period the voters of Oregon implemented their own Proposition 13 type property tax reduction (Measure 5), which lowered property taxes even as per capita revenue rose at a greater rate in Oregon than in Georgia. To be fair, Wimsatt cannot be blamed for this oversight, since the Sierra Club source he cited omitted this detail. We refuted a larger analysis by Arthur C. (Chris) Nelson that included this claim 10 years ago, in a paper for the Georgia Public Policy Foundation entitled American Dream Boundaries: Urban Containment and its Consequences.

Myth 2: Suburban Infrastructure is More Costly: Wimsatt claims that the cost of infrastructure and public services is higher in suburbs than in the urban core. Joshua Utt and I put this myth to rest in research covering all of the reporting municipalities in the US government database, which indicated no such higher costs (The Costs of Sprawl: What the Data Really Show). The claims of higher infrastructure and service costs in the suburbs are largely based on theoretical studies, which invariably suffer from the "length of pipe" fallacy, which fails to take into consideration the substantial differences in the costs of infrastructure construction in already developed areas versus greenfield areas. In fact, labor costs tend to be less in suburban areas. Moreover, much of the cost of suburban development is paid for by home owners, who reimburse developers who have already paid much of the sewer, water and street construction costs. These are not costs to the public or to society, they are costs that buyers voluntarily pay for what they consider to be a better lifestyle. Finally, Core city infrastructure is often obsolete and not able to adequately serve the higher demand that would occur from substantial population increases.

Myth 3: Consolidating Local Government Saves Money: Wimsatt presumes that consolidation of local governments is a way to reduce public expenditures. He cites the case of towns in New Jersey, which he would prefer to see combined. Despite the fact that ivory tower before-the-fact analysis routinely concludes that larger, consolidated local governments are spend less per capita than smaller governments, the record says exactly the opposite. Our research, using US government, New York, Pennsylvania and Illinois state databases shows a consistent relationship between larger local governments and higher expenditures per capita and higher debt per capita.

This should not really be so surprising, since larger governments tend to be further from the people and by definition more remote from their control. Where voters are less important, as is the case with larger local governments, special interests fill the vacuum, generally to the detriment of taxpayers.

With this diluted control by voters, larger governments tend to get into financial difficulty, and a vicious cycle of excessive spending and debt can follow. Often unable to say no to spending interests, they raise taxes. When the electorate loses tolerance for higher taxes, larger governments tend to borrow, which increases expenditures even more. Finally, when they reach high debt levels, it is not unusual for there to be proposals to consolidate these governments with their smaller neighbors, which have been more fiscally prudent. If consolidation is implemented, the new larger local government is granted a new lease on fiscal irresponsibility, and per capita expenditures and debt is likely to rise even higher.

As if that were not enough, labor contracts and service levels are routinely "harmonized" at the highest cost, since employees will not be forced to take pay or benefit cuts and service levels will generally not be reduced for residents. This was cited by the Toronto Business Alliance after a theoretical $300 million in promised cost savings were transformed into substantially higher spending in the newly consolidated city.

Welcome: Wimsatt graciously ends his commentary by saying "Everyone with a prejudice against the suburbs will have to get over it. Even me." Welcome, Mr. Wimsatt.

The widely dispersed opposition to proposals for high speed rail (genuine and faux) led Secretary of Transportation Ray LaHood to say that the Administration would press forward in a patchwork fashion if necessary.

"Patchwork" may be an overstatement. House Appropriations Committee Chairman Hal Rogers (R., Ky.) has plans to eliminate high speed rail funding in the current fiscal year. Already, holes have appeared in the high-speed rail plans with the cancellation of the Milwaukee to Madison line by Gov. Scott Walker and the cancellation of the Cincinnati to Cleveland line by Gov. John Kasich.

Should the Republican congressional high speed rail defunding proposal survive, it will could put an end to such proposals as the Miami to Orlando high-speed rail line, which has been advertised as an $8 billion project but which international experience suggests could easily reach $16 billion.

Further, the proposed defunding could render California's presently planned San Joaquin Valley "train to nowhere" (Corcoran to Borden, with stops in Hanford and Fresno) as less than patchwork. The California line was already on life support, with the newest estimates indicating a 50 percent cost increase over two years (to $65 billion), bringing overall per mile cost escalation since the initial 1999 estimate to approximately 100 percent (adjusted for inflation). As these difficulties were not enough, the Community Coalition on High Speed Rail reports that agricultural interests are now raising concerns about the impact of construct in the San Joaquin Valley. Strong citizen opposition has already developed on the San Francisco peninsula and in the Los Angeles area, which may have been part of the reason that the California High Speed Rail Authority chose the "train to nowhere" route as its first segment.

This could also make it unlikely that there will be any new funding for the Chicago to St. Louis high-speed rail line, which requires at least another $2 billion to complete the trip in four hours (at an average speed of 75 miles per hour). In fact, four hour service was promised in the US Department of Transportation documentation that accompanied the previous $1 billion grant.

It will probably also be the end of the $12 billion (more likely $25 billion) proposal to scrap the 75 mile per hour Chicago to St. Louis system after it is completed and replace it with a completely new, faster line that would travel twice as fast.

A number of commentators (including this author) have suggested that zeroing out high-speed rail is a litmus test of the resolve of Congress to control spending. The first steps may have been taken.

There have been reports for some years about the Volkswagen 1-litre car, so called because it would travel 100 kilometers on one litre of fuel. That is the equivalent of 235 miles per gallon. Earlier reports were that the car would be marketed by now.

Now Volkswagen indicates that the car will be produced "within the next few years." The car will be called the XL1. However, rather than being a 1 L car it will be a 0.9 L car, achieving 261 miles per gallon. The improvement is the result of adding an electric motor that will make the car a plug-in hybrid.

This is just further indication of reality that technological improvements can materially reduce greenhouse gas emissions. Indeed, if the entire automobile fleet could obtain this fuel efficiency by 2050, greenhouse gas emissions from cars would be reduced more than 80 percent, despite substantial increases in driving. This development may mean that petroleum itself could emerge as a "green fuel."

Moreover, this advance is consistent with finding by McKinsey & Company and the Conference Board, in a report sponsored by the Environmental Defense Fund, the Natural Resources Defense Council (NRDC), Shell, National Grid, DTE Energy and Honeywell that "....no change in thermostat settings or appliance use, no downsizing of vehicles, home or commercial space and traveling the same mileage” and no “shift to denser urban housing" would be necessary to achieve substantial greenhouse gas emission reductions in the United States.

Volkswagen L1 (2009) photo by RudolfSimon

Vice President Joe Biden announced today a plan to spend $53 billion over the next six years on passenger high-speed rail projects that will help reach the goal of giving 80 percent of Americans access to high-speed rail within 25 years. According to the announcement, the proposal will place high-speed rail "on equal footing with other surface transportation programs." The initiative includes $8 billion in the President’s FY 2012 budget proposal, of which $4 billion will be focused on building new infrastructure and $4 billion will be dedicated to system preservation and renewal. The announcement makes no mention how the plan will be paid for.

Congressional reaction to the announcement was immediate. House Transportation Committee Chairman John Mica (R-FL) and Railroads Subcommittee Chairman Bill Shuster (R-PA) issued a press release expressing "extreme reservations" regarding the Administration’s plan. Several congressional sources we reached for comment pronounced the Administration initiative "dead on arrival."

"What the Administration touted as high-speed rail ended up as embarrassing snail-speed trains to nowhere," Mica said. "Rather than focusing on the Northeast Corridor, the most congested corridor in the nation...the Administration continues to squander limited taxpayer dollars on marginal projects," Mica added. "This is like giving Bernie Madoff another chance at handling your investment portfolio."

Rep. Shuster was equally critical. "The Administration continues to fail in attracting private investment, capital and the experience to properly develop and cost-effectively operate true high-speed rail," he said. "Government won’t develop American high-speed rail. Private investment and a competitive market will." Shuster was also critical of the manner in which the Administration has administered the program. "Selecting routes behind closed doors runs counter to the Administration’s pledges of transparency. ... High-speed rail funding could become another political grab bag for the President. ...If the Obama Administration is serious about high-speed rail, they should stop throwing money at projects in the same failed manner."

The strong condemnation by two leading congressional transportation spokesmen poses a serious obstacle for the Administration’s proposal on Capitol Hill. They are not alone. House leadership has called for cancelling the high-speed rail program as part of its deficit reduction plan.

Opposition from governors and state legislatures adds another hurdle to the Administration’s plan. Without state support high-speed rail projects cannot go forward. But, as we have seen, the governors of Wisconsin and Ohio have declined to participate in the Administration’s HSR programs. Other governors, concerned about potential operating subsidies, open-ended risk of construction overruns or unable to raise the required matching funds, may do likewise.

Florida’s Gov. Scott, in introducing his budget proposal on February 7, offered a hint about his thinking, that makes HSR boosters uneasy. "Over the last few years,’ the Governor said, "Florida accepted one-time hand-outs from th federal government. Those temporary resources allowed state and local governments to spend beyond their means. There was never any reason to think that Florida taxpayers could afford to continue that higher level of spending once the federal hand-outs are gone. The false expectations created by the federal hand-outs are the reason we hear about a multi-billion dollar deficit." The words "high-speed rail" and  "operating subsidies" were not mentioned, but the implication was clear.

Several other high-speed rail projects are in danger of collapse because of stringent conditions demanded by the Federal Railroad Administration (FRA)— conditions that the host railroads find unacceptable. As reported by the respected railroad observer Fred Frailey, high-speed rail projects in Washington State, North Carolina and Virginia, totaling $1.4 billion in HSR grants, are in jeopardy because the service agreements negotiated by the states with Class 1 railroads have been rejected by the FRA as not strict enough. At the core in each case is the railroads’ insistence that passenger train operations must not interfere with freight operations and their refusal to accept penalties for potential delays suffered by passenger trains.

If these projects fall through, there will be little to show for the $10.5 billion HSR program other than a 48-minute reduction in travel time between Chicago and St. Louis as a result of an ongoing project with Union Pacific (see, "The Uncertain Future of the High-Speed Rail Prgram," InnoBrief, January 5, 2001). It is revealing that the only example the White House announcement chose to highlight  was a $38 million program of track improvements between Portland and Brunswick, ME to permit a 30-mile extension of the five Downeaster round trips to and from Boston at slightly increased speeds, as Frailey pointed out.

Given this meager progress, given more than ample evidence of congressional and state-level opposition, and with so many, much more deserving infrastructure needs awaiting federal support (incl. rail in the Northeast Corridor), one wonders why the Administration has chosen to doggedly pursue its unrealistic vision of a nationwide high-speed rail network. We hope Congressmen Mica and Shuster will try to get some answers.

The head of the group pushing the Los Angeles plan for an NFL stadium, Anschutz Entertainment Group, doesn't understand why anyone would be suspicious of the finances behind his plans for a downtown football stadium. From the LAT:

"Almost every other community in the world would be throwing parades," Leiweke said.

Really? A power-hungry developer backed by a reclusive Denver billionaire comes along with a plan to tear down part of the city-owned-and-operated convention center and jam in a stadium without providing any specifics on how the deal would be structured - other than his promise that it won't cost taxpayers a dime - and he's wondering why so many people are skeptical?

"When the proposal gets there, everyone's going to take a deep breath and realize: There is zero risk to the taxpayer," Leiweke said. "This is people trying to scare people. And it's a shame."

More disinterested voices continue to point out that pro sports teams do little, if anything, to boost local economies - and that the job creation figures being bandied about for the downtown stadium are crazy high. From the LAT:

Villaraigosa said the stadium complex would create more than 22,000 jobs, an assertion that drew a laugh from Brad Humphreys, an economics professor at the University of Alberta, Canada, who has studied such facilities for years. "That's way outside the usual garbage that I read," he said. "The best estimate ... would be zero jobs created." Construction jobs, he explained, would be the most visible, but they would be short-term.

Humphreys and colleagues studied every city in North America that had built sports facilities in the last 40 years, "and we were unable to find any evidence that the local economy ever did any better," he said. What such developments tend to do is move existing money, and presumably jobs, around -- as, say, entertainment dollars that would have been spent in Westwood are spent instead downtown.

This piece originally appeared at Mark's LA Biz Observed blog.

The Houston Chronicle editorial board recently argued that light rail is key to combating Houston's traffic congestion problems. But if you look at the three cities with worse traffic congestion than Houston - DC, Chicago, and LA - they have much more transit, including tons of light rail in LA. Transit clearly hasn't solved the problem in these cities. These people aren't stuck in that traffic because they like it - it's because the transit doesn't go where they need to go or isn't timely. This is especially true with the rise of dispersed job centers in those cities where the trains don't go or don't provide good connectivity to the suburbs where people live.  Let's see, in Houston we have downtown (<7% of jobs), uptown/Galleria, the med center, Greenway, Greenspoint, the Energy Corridor, Ship Channel, and NASA - among others.  If that's not a dispersed set of job centers poorly suited to rail connectivity, then I don't know what is.

It's absurd to argue a light rail network focused inside the 610 Loop is going to do anything to relieve congestion or provide relief to commuters from the vast suburbs outside the loop.  The solution is not doubling down on our multi-billion dollar LRT network, but instead scaling it back (University line only, IMHO) and instead spending the funds on a radical increase in express bus commuter services connecting all suburbs to all job centers with frequent nonstop 60+ mph transit using high-speed HOV/HOT lanes.  Imagine driving to your local suburban transit center (which might just be a mall parking lot) and finding regular, frequent express buses (of all sizes) serving every major job center in Houston.  These buses could have amenities like wifi and laptop trays.  They might even be run by private operators (with subsidized fares) competing on routes, schedule, reliability, service, and amenities.  And after they get to the job center, they can circulate to get you right to your building - no long walks in heat, cold, or rain.  Finally, all of this is a single-seat service without annoying and time-consuming transfers from bus-to-rail or rail-to-bus (or even rail-to-rail).

It's a much more practical solution for a city like Houston, but one that requires innovating 'outside the box' as a transit agency rather than parroting the "more rail" mantra that every other transit agency in the country repeats endlessly.

For more details, see these two previous posts:

• The case against rail transit
• A better vision for Metro

This post originally appeared at Houston Strategies.